The government admitted Tuesday that it will soon draft new economic stimulus measures based on a plan being worked out by the ruling Liberal Democratic Party.
The stock market yawned at the news, the key index dropping 262.44 points to 16,606.39. The fall in the Tokyo Stock Exchange's Nikkei average was in response to an announcement Monday that the plan will contain no new income tax cuts this year.
The yen, however, rose slightly to 129.96-129.98 to the dollar as of 3 p.m. The admission that new measures are in the works -- long denied by government officials for political reasons -- was made by Koji Omi, director general of the Economic Planning Agency. "The government will prepare a package of measures," he told a news conference in reference to the LDP move, which will be finalized by Friday.